If you are a landlord there may come a time when you want or need to sell a property. This can become complicated when you have paying tenants in the property but, as long as you meet your responsibilities, it is possible for a landlord to sell a rented property.
Although it might be more complicated to sell your buy-to-let property if it currently has tenants in it (these are known as ‘sitting tenants’), there may be a fairly straightforward solution. You may be able to sell the property without having to go through the process of evicting the tenants by agreeing that they will remain for the remainder of their tenancy within the terms of the sale.
If you sell your property with sitting tenants, the buyer will become the tenants’ new landlord. Their tenancy agreement will still be valid, but the landlord’s name will need to be changed and the agreement updated as soon as possible to reflect the new payment details and any other changes to the rental terms.
It’s important to note the tenants have the right to refuse to sign the updated agreement so it is always best to communicate the changes as soon as possible and, if possible, make yourself available to answer any questions your tenants might have.
However, it may be that this is either not practical or isn’t in the buyers’ plans for the property. If this is the case, you will need to give your tenants notice that you are planning to end their tenancy. This is done under section 21 of the Housing Act 1988, the so called ‘no fault eviction’.
At the moment landlords can only serve a Section 21 notice to expire at the end of, or beyond, the expiry of the fixed term period of the tenancy.
This means tenants can be evicted even if they haven’t necessarily done anything wrong or breached their tenancy agreement in any way, as long as the initial fixed term has ended. If the tenants still have not left the property by the date given in the possession order, then you can apply to the court for a warrant for possession. If granted by the court, then an eviction notice will be served on the tenants and bailiffs can be instructed to evict the tenants if they do not leave by the eviction date. It must be noted that it can take 6-8 months to get a property back when following the Section 21 eviction route, depending on at what stage of the process the tenants leave the property.
However, the government is currently trying to pass a Bill that will end no fault evictions.
While no fault eviction has always given landlords a level of reassurance that they can regain possession of their rental properties at relatively short notice, many feel its existence places at higher risk of uncertainty and even homelessness while less scrupulous landlords have been using Section 21 to avoid having to rectify poor living conditions.
One thing is for sure, eviction is going to become more difficult if no fault evictions are abolished. Landlords will only be able to evict tenants if they can show the tenant has triggered one of the 17 grounds for eviction set out in Section 8 of the Housing Act 1988.
These grounds include:
You can also cite your tenants’ behaviour as the reason for taking the property back. For example, they may have exhibited anti-social behaviour, used the property for illegal reasons or fallen behind in their rental payments.
The Section 8 process is reliant on you following the right procedures.
Firstly, you will need to complete a ‘Notice seeking possession of a property let on an assured tenancy or an assured agricultural occupancy’. This will specify which of the terms of the tenancy have been broken.
You will then need to give your tenants between 2 weeks’ and 2 months’ notice depending on which terms they’ve broken.
If your tenants do not leave the property by the date specified in the Notice seeking possession, you can apply to the court for a possession order. Anecdotally, this is not a precise science. The outcome is not guaranteed to favour the landlord and the decision could very well come down to which judge reviews your application.
If you are planning to invest in rental property, please contact Jeremy in our property team and he will explain how we make the legal side of the process as easy as possible.